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Consumer spending insights from 2022 to early 2023
Looking back at consumers' spending behavior over the past year and into the early part of the year indicates some optimism for 2023.
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A man walks into a convenience store on Nov. 12, 2022 in Nusa Dua, Bali. (JP/Mark Lempp)
W
e have only just passed 2022, and changes occurred throughout that year. It began with an increase in COVID-19 cases caused by the Omicron variant, followed by the war between Russia and Ukraine.
Over the next few months, we saw social mobility increase dramatically since Ramadan, and heading toward the year-end, we welcomed the Group of 20 Bali Summit in November and then the revocation of the public activity restrictions (PPKM) on the eve of New Year’s Eve.
Globally, accelerating inflation rates in major countries was another significant event that affected the global economy. In response to high inflation, the monetary authorities in many countries, including Indonesia, raised their policy rates.
Indeed, high inflation became unavoidable as multiple factors interacted: rising energy prices, food supply disruption stemming from the Russia-Ukraine war and seasonal factors, as well as supply chain disruption due to rapid post-pandemic recovery.
What will be the domestic impact of the aforementioned significant events from 2022? In general, Indonesia has benefited from the rising global prices of commodities, such as coal and crude palm oil.
Coal was again used in some European countries as an alternative to gas, the supply of which had been disrupted by the Russia-Ukraine war. This is reflected in Indonesia's trade balance, which has been positive for the past 32 months.
But high commodities prices are like a double-edged sword.
